New Delhi: The Central Consumer Protection Authority (CCPA) has ordered Barbeque Nation Hospitality Ltd to stop charging service charges at its restaurants, reinforcing the government’s tightening stance on billing practices that regulators and courts have repeatedly called unfair to consumers.
In an order reviewed by Mint, the country’s apex consumer watchdog said it has taken suo motu cognizance of a consumer complaint registered with the National Consumer Helpline (NCH) regarding the inclusion of Barbeque Nation service charge in addition to central and state goods and services tax (GST) in its bills.
The complaint filed in March 2025 sought the return of a ₹service charge 335. According to the CCPA order, while the restaurant initially offered to adjust the amount against a future bill, it later refunded the full amount directly to the consumer in April 2025 after escalation through the helpline. The refund was acknowledged on the NCH portal, after which the complaint was formally closed.
Read also | Are luxury hotels left behind as busy restaurants are at the forefront of the menu?
Established in 2006, Barbeque Nation Hospitality Ltd is a casual dining chain that operates approximately 200 outlets in India and six in the United Arab Emirates, Malaysia and Oman. The company reported consolidated sales of ₹1,233 crore in FY25 and a net loss of Rs ₹27.79 trillion compared to revenues ₹1,254.5 million and a net loss ₹13.41 crore in FY24.
In a related enforcement action, the CCPA in December imposed a ₹50,000 fine on China Gate Restaurant Private Limited, which runs the Bora Bora chain of restaurants in Mumbai, for collecting mandatory service charges in violation of consumer protection norms and a Delhi High Court judgment dated March 2025, Mint reported on 30 December.
Email inquiries to Barbeque Nation Hospitality Ltd went unanswered.
“Sets a clear precedent”
Consumer groups said the moves sent a strong signal to the restaurant industry that mandatory service charges would not be tolerated, while legal experts said the order was important even though the company no longer collected the charge.
“When service charges are not allowed, the CCPA action against a major grocery chain sets a clear precedent for others,” said Ashim Sanyal, CEO of Consumer Voice, a consumer advocacy group. “Collecting a mandatory service charge is illegal and restaurants must comply with the law.”
“A reasoned order was necessary even in the absence of a continuing violation,” said Manish K. Shubhay, partner, The Precept-Law Offices. “By formally recording compliance and ordering an end to this practice, the CCPA has strengthened the Delhi High Court’s decision and created a clear benchmark for enforcement that will be relevant to future cases involving restaurant billing practices,” he added.
The CCPA order in the Barbeque Nation case reiterates the Delhi High Court’s decision that a service charge or gratuity is a voluntary payment and cannot be automatically or defaulted on restaurant bills and that such mandatory collection constitutes an unfair trade practice under the Consumer Protection Act, 2019. It further upholds the CCPA2 guidelines for violations of the July 20 Enforcement and Recovery of Service Charges Rules2.
Read also | EU-India Free Trade Agreement to make premium food ingredients more affordable
Although the investigation found no continuing violation by the company after the High Court decision, the CCPA issued a specific direction to immediately end the practice, if any, through its powers under Sections 20 and 21 of the Consumer Protection Act. The order was signed by Chief Commissioner Nidhi Khare and Commissioner Anupam Mishra, underscoring the regulator’s intention to strictly enforce consumer protection norms related to restaurant billing practices.
The National Consumer Helpline was established in August 2005 by the Ministry of Consumer Affairs as a pre-litigation grievance redressal mechanism to advise consumers and facilitate grievance redressal. It receives over 60,000 complaints a year and between April and December 2025 67,265 complaints were resolved and returned approx. ₹According to official data, 45 million crowns were secured.
